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Are You Rich?

The extraordinary lifestyles of the average and unfamous.

When I was a kid, I thought my grandparents were millionaires. Their house had four stories and artwork on every wall and furniture that made you sit up straight. Birthdays and holidays were marked with a kind note and a check. Twice a year when we went to Chicago, we'd go to Marshall Field's, where I got to pick out any doll I wanted; then it was off to a glamorous restaurant for some exotic foreign cuisine.

It wasn't until just a few years ago when my mother and I started having very frank talks about finances that I learned the truth. My grandparents were not rich. They lived on teachers' pensions and Social Security, supplemented by sales of their artwork (both were painters). They traveled extensively during their lives, but did so by taking out loans. They had no secret stash of stocks and, thankfully, no overbearing debts either. Most of their savings was in their home, which they owned outright about 35 years after they bought it. Even my grandmother's famed jewelry collection consisted mostly of well-crafted fakes.

My discovery was not extraordinary in any way. Part of being a grandparent is presenting the artful illusion of indulgence, especially to the grandkids. Back then, all of my friend's grandparents seemed wealthy.

Those were the days -- you know, when convertibles and caviar were considered indulgences of the elite, and most families had one car and one (maybe two) TVs. When Lifestyles of the Rich and Famous came on each week, cameras trained on the home Jacuzzis and four-car garages, with Robin Leach cooing over the lavish and marvelous excesses of the wealthy.

So when did cashmere coats, leather car interiors, chrome faucets, and marble countertops become standard fixtures for the everyday American? We have TVs in our minivans, for crying out loud.

I actually know people who own Sub-Zero refrigerators and $700-plus shearling coats. There's a Porsche parked in the garage of one of my best friends' homes. (Before that, it was a fully loaded BMW.) His girlfriend drives a Land Rover with heated seats. And two sunroofs.

I hardly run around with the jet set, which makes me wonder -- what does "rich" mean today?

So,are you?If you have $1 million in liquid assets -- not including your home -- you, my friend are rich. At least according to most wealth-management firms.

Before you break out the champagne and caviar, you might want to check the guest list. With about 1 million millionaires, that's hardly an exclusive club these days. (Try running a quick calculation. You may be closer to membership than you think.)

The truly rich dwell in places like Rolling Hills, Calif. (where the average household income is $305,700) and Munsey Park, N.Y. (average household income $117,600). Heck, even residents of Montville, N.J., No. 300 on the list of richest communities, aren't doing too bad, with the average household income in the $100,000-plus range.

Feeling a little like a pauper? Pshaw. Most organizations define the "upper class" as those with an annual income figure of $70,000. The next tier consists of more than 47 million households that earn at least $50,000. Depending on where you live, your 2,200-sq. ft. four-bedroom single-family home is either workaday or a manse. When Coldwell Banker compared home prices in more than 300 markets, it found a $1.2 million difference for the same-sized home in La Jolla, Calif. and Binghamton, N.Y.

While there may be a million-dollar difference in how our homes are priced, there doesn't appear to be a wide gulf dividing the haves and have-nots when it comes to filling our home entertainment armoires, walk-in closets, and heated garages.

Researching my last column, The Price of "Wow," I found out that Richie Rich and the rest of us are buying the same stoves, cars, video cameras, and cigars. When our parents upgraded the cabinets, counters, and appliances in their 1950s ramblers, they spent just $9,000 in inflation-adjusted dollars. Today, the average cost of a kitchen remodel is more than $50,000.

Lifestyles of the rich and famous? We're living it. But can we afford it?

Shop 'til you drop, and then someCertainly, we have more money to spend. From 1970 to 2000, real household income rose by more than 50%, according to the authors of Trading Up: The New American Luxury. Today, there are 15 million households that take in more than $100,000 a year.

Our paychecks and portfolios are fatter than ever, and thanks to mass-manufacturing and merchandising (think Wal-Mart, Kohl's, Circuit City), our everyday necessities can be had at a fraction of what our parents and grandparents paid.

It's that last one, the authors say, that has freed up billions of dollars for discretionary spending. "We estimate that in the last thirty years, at least $3 trillion has been created and become available for spending," they write.

So it's off to the mall!Baseball may be America's favorite pastime, but shopping is our No. 1 recreational activity. When our dogs are too tired to "do" the top floor of the mall, we can go home to our flat-screen TVs where we've TiVo'd Rich Girls, Cribs, The Fabulous Life Of..., and It's Good to Be... There's no shortage of shows about other people shopping. Clearly, it's good for ratings.

It's certainly good for the manufacturers of luxury goods. Having something for us ordinary folks to buy is just good business. To hook "aspirational buyers," car manufacturers have lower-end models for the rest of us. My friend's Porsche Boxster -- at around 40 grand -- is a far cry from the $80,000 Porsche 911. His former BMW was not, he assures me, a $90,000 7-Series. Is Prada a bit out of reach this month? Try Miu Miu. Save your allowance and you can have a little something-something by '90s design superstars Cynthia Rowley, Todd Oldham, and Isaac Mizrahi... from your local Target.

Does mass-marketing of Mizrahi lower a brand's prestige? Quite the opposite, I suspect. Once you've had a taste of luxury, next stop: the real deal. Because, man, you look like a million bucks.

I'm rich!To answer the question -- Are you rich? -- I offer the following answer: Who cares?

A wealthy lifestyle is more than a fat checking account and a car with heated leather seats that fully recline. Studies repeatedly show that intangibles like being married to your best friend, feeling connected to the community, and good health is what puts that special kick in our steps.

Still, let me focus on some of the dollars and cents matters that make me feel rich:

Being able to pay my car insurance bill when it arrives in the mail -- three months before it is due.

Putting travel on my credit card, but knowing that I can pay it off when the bill comes due, and that I'm getting cash back for my purchase.

Knowing I can afford a $300 pair of shoes, but relishing the savings when I find an even better alternative at a discount clothing store or thrift shop.

The ability to go on a spur-of-the-moment sushi outing.

But somehow stuff -- despite being more affordable -- is taking a bigger toll than ever on our futures. In 1999, more people declared bankruptcy than graduated from college. When Myvesta.org, a debt-counseling firm, surveyed its clients, it found that the average amount of credit card and unsecured debt has risen almost 50% to $77,000 in 2003. Mortgage debt is up almost 25% to $207,000 over the same period.

There are certainly some truly tragic reasons that some people go into debt. But even more heartbreaking is those who go into debt because they aspire to the worst aspects of the next income bracket. It's not their happy home lives or their charitable contributions that keep us riveted to the lifestyles shows on cable TV. It's their cars, shoes, and summer homes. Sadly, such aspirations are draining too many bank accounts and destroying too many futures.